Orbit International Corp. Announces Second Quarter Results and Settlement of Class Action Lawsuit

Business Wire, August 11, 1998

HAUPPAUGE, N.Y.--(BUSINESS WIRE)--Aug. 11, 1998--Orbit International Corp. (NASDAQ:ORBT) today announced results for the second quarter and six months ended June 30, 1998. The Company also announced that a settlement with respect to the USA Classic class action securities litigation has been reached subject to an executed "Stipulation of Settlement" by each of the parties and court approval of such Stipulation of Settlement.

The Company's portion of the class action litigation settlement is $1,000,000 of which $500,000 had been previously accrued. Accordingly, the Company has recorded an additional charge of $500,000 during the second quarter of 1998. In connection with the resolution of such matter and its related uncertainties and the Company's consistent earnings from its continuing operations, pursuant to SFAS 109, the Company has recorded a deferred tax asset of $1,150,000 during the second quarter of 1998. The Company currently has a net operating loss carryforward in excess of $20,000,000.

Net sales were $4,235,000 for the three months ended June 30, 1998 compared to $4,426,000 for the same period last year. Net income for the quarter was $1,110,000 or $.16 per share compared to $485,000 or $.07 per share for the same period last year. Excluding the impact from the settlement of the class action litigation and the income tax benefit, net income was $460,000 or $.06 per share compared to $485,000 or $.07 per share for the same period last year.

For the six months ended June 30, 1998, net sales were $8,520,000 compared to $8,396,000 for the same period last year. Net income for the six months ended June 30, 1998 was $1,581,000 or $.22 per share compared to $894,000 or $.13 per share for the same period last year. Excluding the impact from the settlement of the class action litigation and the income tax benefit, net income was $931,000 or $.13 per share compared to $894,000 or $.13 per share for the same period last year.

Dennis Sunshine, President and Chief Executive Officer commented, "Although we anticipated our portion of the settlement to approximate what was previously provided for, we are pleased that we can finally put the class action litigation behind us without a material financial impact. This litigation has burdened the Company for almost five years and we have spent over $1,300,000 in legal fees during such period. Because the uncertainty of the class action litigation has been eliminated, the Company, pursuant to SFAS 109, recorded a deferred tax asset during the quarter which reflects the probability of the utilization of our net operating losses through continuing profitability. The full impact of this deferred tax asset, based upon the Company's future attainment of increased levels of profitability, could exceed $8,000,000."

Sunshine added, "Net sales have increased slightly during the six months ended June 30, 1998 as compared to the same period last year and have decreased slightly during the second quarter of 1998 as compared to the same period last year. While we anticipate a slight reduction for 1998 as compared to 1997, we expect to commence shipping orders pursuant to the Hellfire II Missile Power Supply, repair and retrofit power supplies for the AWACS program and to make shipments pursuant to a recent $600,000 order from the Power Unit Segment's largest customer for oil and gas exploration during the fourth quarter of 1998 and into 1999. We believe that shipments pursuant to these programs will have a positive impact on the Company's fourth quarter net sales and we are optimistic that these programs will contribute to increased sales levels for 1999."

Orbit International Corp., based in Hauppauge, New York, is involved in the manufacture of customized electronic components and subsystems for military and nonmilitary government applications. Its Behlman Electronics, Inc. subsidiary manufactures and sells high quality commercial power units and low noise uninterruptable power supplies (UPS). The Behlman military division designs, manufactures and sells power conversion devices, custom power units and electronic products for measurement and display. For a more detailed discussion of the risks inherent in the Company's business the reader is referred to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997.

This press release contains "forward-looking statements", within the meaning of the Private Securities Litigation Reform Act of 1995, regarding the Company's expectations relating to future growth, future profitability and future revenues. These forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the actual future results of the Company to be materially different from such forward-looking statements. Factors that might result in such a difference include, without limitation, variable market conditions and changing needs of the defense sector. The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are described from time to time in the Company's reports and registration statements filed with the Securities and Exchange Commission.